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HomeMy WebLinkAbout2003-094 ." .~ . . RESOLUTION NO. 2003-94 2 3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO REVISING SECTION 1 OF RESOLUTION 90-2 RELATING TO THE AMOUNT OF AN INFRASTRUCTURE FEE TO BE LEVIED FOR RIGHT-OF-WAY IMPROVEMENTS ANDIOR PUBLIC IMPROVEMENTS WITHIN THE VERDEMONT AREA, AND ADOPTING THE FOURTH (4TH) AMENDMENT TO THE ENGINEER'S REPORT. 4 5 6 7 8 WHEREAS, the City of San Bernardino (the "City"), on December 4, 1989, adopted an urgency ordinance (MC-690) to establish and authorize a certain infrastructure fee and further 9 on January 3, 1990, adopted an additional urgency ordinance (MC-695) which extended the 10 establishment and authorization of the levy of an infrastructure fee (the "Verdemont 11 12 Infrastructure Fee") for the purposes of funding the costs of certain right-of-way improvements and public improvements within the Verdemont Area, all as more fully described in the urgency 13 ordinance MC-695; and 14 WHEREAS, in connection with its adoption of the urgency ordinance MC-695, the City, on January 3, 1990, also adopted Resolution No. 90-2, setting the initial amount of the 15 16 Verdemont Infrastructure Fee; and 17 WHEREAS, on March 19, 1990, Ordinance MC-707 was adopted to replace the prior ordinances MC-690 and MC-695 and to add Chapter 15.73 to the Municipal Code dealing with 18 19 the Verdemont Infrastructure Fee; and 20 WHEREAS, on June 25, 1990, Section I of Resolution No. 90-2 was amended by 21 Resolution No. 90-253, revising the amount of the Verdemont Infrastructure Fee from $7,375 to 22 $6,068; and 23 WHEREAS, on March 2, 1992, Section I of Resolution No. 90-2 was amended by Resolution No. 92-87, revising the amount of the Verdemont Infrastructure Fee from $6,976 to 24 25 $7,699; and -1- P:\C1erical Services DeptlMargaret Parker\Resolutionli\2003\OJ-Q4-07 Verdemont Motion A MCC Resolutlon.doc I . 2003-94 WHEREAS, a public hearing was duly advertised and held on February 20, 1995, and 2 the hearing closed and after public comment, Resolution No. 95-40 was adopted to amend Section I of Resolution No. 90-2 revising the amount of the Verdemont Infrastructure Fee from 3 4 $7,699 to $1,500 and approving the Third Amendment to the Engineer's Report; and 5 WHEREAS, a public hearing was duly advertised and held on April 7, 2003 and the hearing closed and after public comment, Resolution N3003-9a,as adopted to amend Section I of Resolution No. 90-2 revising the amount of the Verdemont Infrastructure Fee from $1,500 to 6 7 8 $3,000 and approving the Fourth Amendment to the Engineer's Report. 9 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: 10 11 Section I. Section I of Resolution No. 90-2 is hereby amended to read: 12 "SECTION I: Verdemont Infrastructure Fee. The Verdemont 13 Infrastructure Fee as established pursuant to the urgency ordinance MC-695, as 14 presently found in Chapter 15.73 of the Municipal Code, and as initially set by 15 Resolution No. 90-2 is hereby revised to be set at a fee in the amount equal to 16 $3,000.00 effective sixty (60) days from the date of this Resolution, per 17 Equivalent Dwelling Unit, as said term is defined in the urgency ordinance MC- 18 695 and in the Municipal Code. 19 Said Verdemont Infrastructure Fee shall also be subject to further increase pursuant to the terms of any subsequent resolutions to be adopted by the Mayor and Common Council as may be deemed necessary in the best interest of the City. 20 21 22 Said fee makes no provision of any part of the water transmission, distribution, 23 storage or delivery system in the area defined and all water related fees shall be 24 paid per established policy of the City of San Bernardino Water Department. 25 Reimbursement provisions contained in Ordinance MC-107, relative to right-of- way improvements, shall not apply to the adjusted fee of $3,000.00." -2- P:\Clerical SCr\'lces Deptl.'\hrgard ParkerlResolutlons\2003\OJ-04-117 Verdemont MOllon A MCC Resolutlon.doc .' . . 2003-94 Section 2. The Mayor and Common Council of the City of San Bernardino do 3 hereby find and determine that the fee as provided in this Resolution does not exceed the estimated reasonable cost of providing the service, or facilities for which the fee is imposed, and further find that "Public Improvements" referred to in the urgency ordinance shall be given first priority for consideration of funding over the "Right-of-Way Improvements." Specifically, the 2 4 5 6 $3,000 Verdemont Infrastructure Fee shall be placed in a separate fund and shall be used only to 7 fund infrastructure improvements in the Verdemont Area as described and defined in Chapter 8 15.73 ofthe San Bernardino Municipal Code. 9 Section 3. The Fourth Amendment to the Engineer's Report, entitled, "Development 10 Infrastructure Fees - Verdemont Area - March 27, 2003," is hereby adopted. Section 4. This Resolution shall take effect upon its adoption and execution in the 11 manner as required by the City Charter. 12 1/1 13 1/1 14 /1/ 15 /II 16 /1/ 17 /1/ 18 /II 19 /II 20 //1 21 /II 22 //1 23 /II 24 /1/ 25 /1/ -3- P:\Clerical Services Dept\:vJargaret Pllrker\ResolutioDs\2003\03-04-07 Verdemont Motion A MCC Resolutlon.doc 2003-94 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO REVISING SECTION 1 OF RESOLUTION 90-2 RELATING TO THE AMOUNT OF AN INFRASTRUCTURE FEE TO BE LEVIED FOR RIGHT-OF-WAY IMPROVEMENTS ANDIOR PUBLIC IMPROVEMENTS WITHIN THE VERDEMONT AREA, AND ADOPTING THE FOURTH (4TH) AMENDMENT TO THE ENGINEER'S REPORT. 3 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 meeting thereof, held on the Common Council of the City of San Bernardino at a j t. reg. ,2003, by the following vote to wit: Aves Navs Abstain Absent x ----1L --1L x x ~ ----1L ~~1 /;J ~L~ Rac G. Clark, City Clerk 17 The foregoing resolution is hereby approved this ~lh ,2003. April 18 19 20 Approved as to form and Legal Content: 21 By: 22 23 24 25 -4- P:\C1erical Service~ Dcpt\:\largaret ParkerIRnolutions\2003\03-04-07 Vcrdemonl Motion A MCC Resolutlon.doc 2003-94 FOURTH AMENDMENT TO THE ENGINEER'S REPORT DEVELOPMENT IMPACT FEES VERDEMONT AREA (VERDE MONT INFRASTRUCTURE FEE PROGRAM) March 27, 2003 Prepared by Development Services Department City Engineer City of San Bernardino, California 2003-94 PURPOSE This Fourth Amendment of the Engineer's Report is the fourth in several anticipated amendments to the basic report as prepared in January of 1990. These amendments are intended to update the information contained in the initial Engineer's Report, describe the events that have taken place in the Verdemont Area and set forth the basis for any increase in the fee associated with the program. It should also serve to update the anticipated construction schedule as may be determined from time to time by the Mayor and Common Council. PREVIOUS ACTIONS In December of 1989, the Mayor and Common Council enacted emergency ordinances to effectively implement the Verdemont Infrastructure Fee Program. Along with this prior action, Resolution No. 90-2 was adopted setting the Fee at $7,375.00 per dwelling unit. This urgency ordinance was extended and on March 19, 1990, Ordinance MC 707 was formally adopted which added Chapter 15.73 to the Municipal Code. Additionally, Resolution No. 90-253 was adopted as a modification to Resolution No. 90-2. This later resolution deleted all of the water system work from the program and reduced the fee to $6,068.00 per dwelling unit. In January of 1991, Resolution No. 91-9 was adopted based on the First Amendment to the Engineer's Report and had the effect of increasing the fee to $6,976.00. On March 2, 1992, Resolution No. 92-87 was adopted and had the effect of once again increasing the fee, this time to a level of $7,699.00. On February 20, 1995, Resolution No. 95-40 was adopted which decreased the Verdemont Infrastructure Fee to $1,500 as further set forth in the Third Amendment to the Engineer's Report for the reasons described therein. The purpose of the Ordinance was to regulate the use and development of land so as to assure the new development bears a proportionate share of the cost of capital expenditures necessary to provide right-of-way improvements and public improvements within or for the benefit of the Verdemont Area. To date, the previously established Mello-Roos Communities Facilities District has been repealed by appropriate actions of the Mayor and Common Council to officially rescind the Community Facilities District No. 995. All previously issued bonds of the Communities Facilities District No. 995 have been retired with funds made available to the City through the sale of vacant properties to the Economic Development Agency of the City of San Bernardino ("EDA"). Such properties were acquired by the City through the foreclosure of the special tax lien imposed by Communities Facilities District No. 995 on the vacant properties that were delinquent in the payments thereof. This CFD No. 995 was implemented as a means to allow projects in the works to cover the cost of the fee that were not anticipated at the outset of the project. It also provided for the payment of School Fees and involved four (4) developers holding seven (7) properties at that time. In late 1990 bonds were sold payable from the special taxes to be paid within the boundaries of the Communities Facilities District No. 995 and the funds were placed with a fiscal agent. During 1991, four (4) Tracts were completed and the developers applied for reimbursement for construction of eligible improvements installed by their efforts. Additionally, the City adopted a budget plan for additional improvements and advanced funds for construction. In 1994 the original bonds were refunded and unspent proceeds were utilized to reduce the debt obligations of such bonds. In 1999 the EDA issued a separate bond payable from the Low and Moderate 03-04-07 4lh Amend to Eng Rcp Verdcmonl Agr 2 2003-94 Income Housing Fund to acquire the remaming properties (Bice and Glazier, and to pay delinquent taxes on behalf of Dr. Feldkamp) from the City which were foreclosed upon by the City due to the delinquent special taxes accruing to such properties. To date, only two (2) single property parcels have pre-paid the Verdemont Infrastructure Fee. There has been no overwhelming effort by the development community to remit payments of the Verdemont Infrastructure Fee to avoid future increases and as a result, there is little funding presently available. After distribution to bond service, cost of issuance, reserve fund, capitalized interest and payout to the School District, there was an estimated available balance of $466,000.00 for construction. As of December 1991, a total of $1,893,854.88 in public improvement projects have been funded and awarded for construction. In 1994, the then established Communities Facilities District No. 995 was found to be in default as to several of the larger vacant properties. The City restructured the bond debt as discussed previously. Additionally, through loans from the EDA in 1993 pursuant to the Verdemont Loan Agreement and the creation of another assessment district (AD No. 987) funds were obtained for the completion of street improvements on Palm Avenue from Kendall Drive to Verdemont Avenue, completion ofa Traffic Signal at Palm Avenue and Kendall Drive and the construction of a box culvert at Palm Avenue and Cable Creek and the construction of Chestnut Avenue Storm Drain and Debris Basin. The loan from the EDA provided for all costs associated with the Chestnut Avenue Storm Drain, one-half of the costs associated with construction of the Palm Avenue box culvert and traffic signal. The loan total was in the initial principal balance of $1,908,063.68 and carries an interest rate of 5% per year. The loan is to be repaid, with interest, as per the 1993 Verdemont Loan Agreement and the proposed Amendment No. I which includes repayment from the Verdemont Infrastructure Fee. It is proposed that such Verdemont Loan Agreement with the EDA be restructured (Amendment No. I) as part of the scope being addressed by this Fourth Amendment to provide for a priority payment to the EDA on a set amortization of the principal, plus interest thereon, of such loan from the EDA over a ten-year (10) period of time. In total, over $2,440,000.00 in improvements have been completed in the Verdemont Area in addition to some limited development of schools, single-family development and other improvements to the drainage system and street systems. AMENDMENTS Per the original Ordinance, the Verdemont Infrastructure Fee would adjust each year to reflect changes in construction costs, wages, overall project costs, construction completed and changes in the land use in the designated area. As originally proposed, the fee would have an adjustment of 15% for each of the first three years and 10% per year for the next two years. However, AB 1600 requires that fees be adjusted only in accordance with actual costs. Chapter 15.73 of the Municipal Code establishing the Verdemont Infrastructure Fee provide for adjustment as often as necessary with appropriate action by the Mayor and Common Council and as supported by staff analysis of the costs. California overall had experienced a significant downturn in the economy beginning in 1991. As a result, the City of San Bernardino has seen development drop to one-fourth the level prior to 03-04-07 4th Amend to Eng Rcp Vcrdcmont Agr 3 2003-94 the economic downturn. Many of the projects were under construction and fully funded prior to the downturn and have now been completed. As noted in previous sections of this Fourth Amendment to the Engineer's Report, several of the developments that formed the Mello-Roos Community Facilities District No. 995 were unable to commence construction of their projects and have since gone into default. This required the restructuring of the previously issued bonds that were supported by the special taxes levied within the Mello-Roos Community Facilities District, in addition to the acquisition by the EDA of certain foreclosed parcels within the former boundaries of said District. Except for the completion of tracts already funded and the development of the "Feldkamp" parcel within the former Communities Facilities District, there has been no significant development in the area and virtually no revenues generated by the Verdemont Infrastructure Fee. The property commonly known as the "Glazier" property which was acquired by the EDA in 1999 from the City is presently scheduled to transfer title to two residential single-family homebuilders for the construction of 107 single-family units plus the construction of up to 5 acres of a neighborhood park. The third property acquired by the EDA in 1999 known as the "Bice" property is severely impacted by the lack of a suitable final tract map, the designation of the "Bice" property as critical habitat for the San Bernardino Kangaroo Rat and the requirement for numerous flood control and street realignment projects as a condition of development. Several developers representing the vacant land holdings, existing developers with projects in the area and other interested parties have once again contacted the City to express interests to initiate development activities within the Verdemont Area. Based upon improvements in the general real estate market for single-family residential development within the City and the availability of low interest rate mortgage financing at this time, the City anticipates that additional demands will be placed upon the infrastructure needs within the Verdemont Area upon the development of the presently proposed projects. The current level of the Verdemont Infrastructure Fee of $1 ,500 per equivalent dwelling unit, as established in 1995, is inadequate to address the present infrastructure needs necessary to serve the Verdemont Area. An increase in the Verdemont Infrastructure Fee is appropriate at this time and will not adversely impact the rate of development within the Verdemont Area. After review of the completed improvements by the City Engineer, it has been determined that although many access, flooding and circulation problems have been addressed, there arc a significant number of other public improvements that need to be completed in the Verdemont Area that would serve the community interests for future residents of this Area. However, it should be noted that rapid or uncontrolled construction, provided the economy continues its rate of recovery and assuming the continued all-time low mortgage interest rates, could require increased adjustments in the Verdemont Infrastructure Fee to address the needs in future years. In addition, conditions may be imposed upon developers within the Verdemont Area for the construction of additional infrastructure components or right-of-way improvements which may, out of necessity, allow for such impositions to be considered as a payment in lieu of the Verdemont Infrastructure Fee at the discretion of the Mayor and Common Council. It is estimated that without further adjustment, the $1,500.00 fee will generate $3,184,500 in revenue to address some of the goals of the ordinance which set forth in excess of $22 million of public improvements needed for the Verdemont Area. However, the proposed increase of the Verdemont Infrastructure Fee to $3,000.00 with the projected number of residential dwelling 03-04-074111 Amend to Eng Rcp Vcrdcmonl Agr 4 , 2003-94 units of approximately 2,123 to be built within the next 10 years should generate approximately $6,369,024 (see Exhibit 2 of Staff Report and page 5 of this report) to pay the principal and interest of any financial obligations incurred or to be incurred by the City in the provision of the Public Improvements. Nevertheless, even at this level of a fee, there is a funding deficit upwards of $12,000,000 which may ultimately be needed to complete the other needed improvements. The primary funding goals of the City through the Verdemont Infrastructure Fee are the repayment of the EDA 1993 Verdemont Loan Agreement and the proposed financing of a new Verdemont Fire Station which is anticipated to be funded through a State of California Infrastructure Bank loan. If the number of single-family homes developed decreases to 1,411 during the next 10 years, the City will have adequate funds to pay the annual debt service obligation on both loans but the City will not be able to undertake any further infrastructure projects unless the Verdemont Infrastructure Fee is increased or the annual number of newly constructed homes increases. On the other end of the spectrum, if the presently estimated number of 2,123 single-family homes are developed in the next 10 years, not only will the two loans be repaid but there will be upwards of $2,134,550 of additional funds available to be used ($213,455 per year) for optional repayments of either of the loan above or to undertake permissible Public Improvements and Right-of-Way Improvements under the Ordinance. Further, it is the desire of the Mayor and Common Council to give preference in funding to the "Public Improvements" as noted in the Ordinance. The development community will be addressing some if not all of the right-of-way improvements as conditions of development and the City presently anticipates a need for the public improvements requirements set forth in the Ordinance to be addressed through development conditions of approval. The anticipated projects and the currently estimated capital costs and financing costs for each such Public Improvements and Right-of-Way Improvements within the Verdemont Area are set forth below. (Note: This is also shown on Exhibit 2 of the Staff Report.) Principal Annual Interest Type of Infrastructure Cost Cost Term Rate I. 1993 EDA Loan Agreement $1,730,870 $224,155.58 10 Years 5% 2. Fire Station - State Infrastructure Bank Loan $1,700,000 $199,291.86 10 Years 3% 3. Other Improvements and Prepayment of Loans $2,134,550 $213.455 10 Years 0% TOTAL $5.565.420 $636 902.44 CONCLUSION It is the intent of the City of San Bernardino to continue to stimulate development within the City and it is believed that this can be accomplished within the Verdemont Area with the proposed increase in the Verdemont Infrastructure Fee. The Verdemont Infrastructure Fee was originally established to ensure that certain improvements were completed in a timely manner. Several 03-04-07 4th Amend [0 Eng Rcp Vcrucmonl Agr 5 [. ". " 2003-94 projects have been completed in the Verdemont Area and the circulation system, access points and storm drain protection systems are greatly improved. New development will still be conditioned to install improvements adjacent to their projects and such other improvements as deemed necessary for orderly growth. Although the increased infrastructure fee will generate significant revenue for some necessary improvements, it remains inadequate even at this level to fully address all of the infrastructure needs in the Verdemont Area. Therefore, in accordance with the original urgency ordinance and Chapter 15.73 of the Municipal Code, annual reviews must be made each year as to the amount of the Verdemont Infrastructure Fee and the remaining infrastructure requirements that were used to finance many of the then needed Public Improvements and Right-of-Way Improvements needed to accommodate development. At this time the primary concern within the Verdemont Area is the necessity to obtain funds for the construction of a Fire station that was originally anticipated in the initial version of the Engineer's Report from 1990 and to repay the 1993 Loan Agreement. 03-04.07 4lh AmcmJ to Eng Rcp Verdcmonl Agr 6